Olam Intl   

OLAM_OLAM

wahahahaha, Peter Pan, never never land !?!?!?!

 

Sell low buy high??? How to make $? Could it be your typo error?

 

American Tower  has been  on a winning streak.  MW made money? I doubt so. Unless MW  is adopting the new  strategy that  the infamous " Peter Pan" , one of  the forum user here, had came up with-" Selling  low and  buying high"   .

 

probably already stage/ make, before announcing.

 

not sure wheather he had already earn a lot from this counter?

 

The End For Block  And His  Muddy Waters?

Muddy Waters strikes again, but without much mud this time round.  The new  victim,  American Tower, dipped by a modest 1.1% after MW declared war on it. Seems like MW and Block  have lost  their magic, and the market  has  " underweight"   the duo's comment.  So what's next? The same old " Moody's Rating" trick again? Or is it the " Sovereign Bailout" one?

Nice tatic  they had back there, trying to make a ill  fortune by scaring less informed  investors. Now that they have lost their reputation and creditability, I wonder how long more  MW can operate? And what job prospects left for Block? Perhaps throughtout all these years,  the pair has had sold more than just counters- their future, creditworthiness,  and moral values.

 

Author: Rosesyrup

 

Muddy Waters Fails to Shake American Tower With Short Bet

Never before has the unveiling of a Carson Block short sale done less to sway investors.

American Tower Corp. (AMT) fell 1.1 percent to $73.87 yesterday, the smallest first-day drop ever in a stock after a report from Muddy Waters Research, which built its reputation with bearish calls on Asian companies. New Oriental Education & Technology Group Inc., Focus Media Holding Ltd. and Sino-Forest Corp. lost at least 20 percent after previous Muddy Waters notes.

Investors in the operator of cell-phone antennas were unshaken by Block’s analysis and firms from Wells Fargo & Co. to Macquarie Group Ltd. said they disagreed. Block said yesterday that American Tower is worth 40 percent less than its share price because it overstated the value of its acquisitions and has poor corporate governance.

“The market is sometimes a lot smarter,” William Ferer, who manages about $3 billion, including American Tower shares, at W.H. Reaves & Co. in Jersey City, New Jersey, said in a phone interview. “I took it quite positively that after a full day of digesting this Muddy Waters report the stock was only down a little bit.”

The shares rose 1.5 percent to $74.95 at 10:13 a.m. in New York today, erasing yesterday’s loss.

Wireless Towers

American Tower, the second-biggest U.S. REIT by market value, owned or leased 22,599 wireless and broadcast communication towers in the U.S. and 33,074 towers internationally as of March 31, according to its most recent quarterly filing. Matt Peterson, a spokesman for the real-estate investment trust, didn’t respond to messages seeking comment. The Boston-based firm has a market value of $29.2 billion, data compiled by Bloomberg show.

About 26.3 million shares of the company changed hands yesterday, the most in five years, Bloomberg data show. More than 171,000 put options traded, about 90 times the average for 2013 through last week.

“This stock should be mid-40s,” Block said in a Bloomberg Television interview yesterday. “Our goal with this report was for people to actually read it and I think people are reading it and after they read it, digest it and the company responds, I’m feeling very good about it.”

This is the first time Block has targeted a U.S. company. The 37-year-old investor gained fame for his short-selling calls in Asia after regulators halted trading in four of the first five companies he targeted starting in June 2010. Hedge fund manager John Paulson sold his Sino-Forest Corp. stake at a loss after Block said the company overstated its plantation assets. Sino-Forest filed for bankruptcy protection in 2012.

Little Impact

American Tower shares have more than tripled since November 2008. The stock trades at 25.8 times funds from operations, compared with a multiple of 19.8 for Simon Property Group Inc., the largest U.S. REIT by market value.

“I don’t think I’ve ever seen a Muddy Waters report having this little an impact on the market,” Ophir Gottlieb, managing director at San Francisco-based Livevol Inc., a provider of options-market analytics, said by phone yesterday. “It just wasn’t that big of a deal.”

Hedging by people who owned the stock may explain why the shares didn’t fall more after put trading surged, Gottlieb said. In the two days before the report, more than 40,000 bearish contracts changed hands each day, compared with a historical average of 1,900, according to data compiled by Bloomberg. The shares slid 4 percent from July 15 to 16.

$250 Million

There is about a $250 million discrepancy between the price American Tower said it paid for towers in Brazil and the actual sale price, the Muddy Waters report said, citing research from financial statements of the companies acquired, Brazil’s central bank and six industry sources.

American Tower rejected Block’s assertion that it paid around $300 million for the Brazilian communication sites, according to a filing released after the close of trading yesterday. The company said the price was about $585 million for the towers, financed by intercompany loans, cash from operations and equity contributions.

American Tower’s management shows a “lack of faith” in the company’s stock price, Block said in his report, citing share sales from exercised options. The company also faces weak growth overseas, such as India, Ghana and Brazil, according to the note.

“When we have gone into the field and actually rolled up our sleeves and figured out what is going on in many of these emerging markets, the reality is actually very different from what the company tells you,” Block said yesterday. “The way that this business is working overseas, it’s just not going to work as well as it has in the U.S.”

Pedestrian, Foolish

Muddy Waters failed to identify any new challenges facing American Tower, according to Andrew Hamerling, managing partner of Wavelength Asset Management, a New York-based hedge fund.

“This report was pedestrian and foolish,” said Hamerling. American Tower is one of the largest holdings in the Wavelength Asset Management fund, he said. “The emerging market risks were always there, and the company had done an admirable job managing those risks and returning value to shareholders.”

Wells Fargo’s Jennifer Fritzsche said she disagreed with Block’s contention that the business faces a major threat from Wi-Fi because data demand is growing, according to a note published yesterday. Investors should buy shares of this “high-class” company, Macquarie’s Kevin Smithen said in a report.

The stock has 19 buy ratings, five holds and one sell, according to analyst recommendations compiled by Bloomberg. The shares are down 4.4 percent in 2013.

Real estate investment trusts, whose primary income streams are from properties, don’t pay federal income taxes. In exchange, they’re required by the Internal Revenue Service to distribute at least 90 percent of their taxable earnings to shareholders in the form of dividends.

To contact the reporters on this story: Nikolaj Gammeltoft in New York at ngammeltoft@bloomberg.net Scott Moritz in New York at smoritz6@bloomberg.net

To contact the editor responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net

 

Food Price Outlook, 2013

Despite the severe drought in the Midwest, retail food prices were mostly flat in 2012. Prices rose for beef and veal, poultry, fruit, and other foods in 2012 however, prices fell for pork, eggs, vegetables, and nonalcoholic beverages. For the remaining food categories, prices were unchanged for the most part. The drought has affected prices for corn and soybeans as well as other field crops which should, in turn, drive up retail food prices. However, the transmission of commodity price changes into retail prices typically takes several months to occur, and most of the impact of the drought is expected to be realized in 2013.

Based on current conditions, ERS's inflation forecast for both all food and food-at-home (grocery store) prices in 2013 is for increases of 2.5 to 3.5 percent. This forecast means that prices are likely to increase more than in 2012, but that overall inflation is expected to be near the historical average for both indexes. Inflation is expected to remain strong, especially in the first half of 2013, for most animal-based food products due to higher feed prices. For most food categories not directly affected by the 2012 drought, however, inflation is expected to be at or even below normal levels.

Food Price Forecast for 2013

Food prices are expected to rise three to four percent this year, according to the U.S. Department of Agriculture. That's because of the terrible Midwest drought in 2012 that withered crops in the field. As a result, prices for corn, soybeans and other grains rose. Since it usually takes several months for these commodities prices to translate to the food you buy, most of the drought's effect will occur in 2013.

 

Higher feed prices will directly affect the cost of meat and any other animal-based product. Also hardest hit will be cereals, baked goods and other grain

 

 

It break the 1.59 support. Thus, now it becomes the new resistance.

stevenk      ( Date: 06-Jul-2013 14:22) Posted: As the USD dollar moves higher, commodities generally move lower. The opposite happens as the dollar moves lower. It is not a perfect correlation, but it is fairly close. There are many reasons why the value of the dollar has an impact on commodity prices. The main one is that commodities are priced in dollars. When the value of the dollar drops, it will take more dollars to buy commodities. Another reason is that commodities are traded around the world. Foreign buyers will purchase our commodities – corn, soybeans, wheat, oil, etc. – with dollars. When the value of the dollar drops, they will have more buying power and simple economics tells us that demand typically increases as prices drop.

 

As the USD dollar moves higher, commodities generally move lower. The opposite happens as the dollar moves lower. It is not a perfect correlation, but it is fairly close.

There are many reasons why the value of the dollar has an impact on commodity prices. The main one is that commodities are priced in dollars. When the value of the dollar drops, it will take more dollars to buy commodities.

Another reason is that commodities are traded around the world. Foreign buyers will purchase our commodities – corn, soybeans, wheat, oil, etc. – with dollars. When the value of the dollar drops, they will have more buying power and simple economics tells us that demand typically increases as prices drop.

 

 

 

Olam Olam = lump the big stone and sink!!!! 1.595, 1.60. See Monday will goes to 1.5 & below.

 

Olam is smart is investments make use of people money !!!=-

To Investment in    Africa    a global processor of agricultural products.need alot

money, If Olam use their fund money for big projects then big big  high debt is they, Temasek had put in alot of money Mrs lee support, can not be fails lah.

Q4 results will be  announcement  , see how much Olam to be

 

Also, their cash flow is not healthy too.

Obfuscate      ( Date: 05-Jul-2013 17:49) Posted: Olam has a nice portolio of businesses but its high debt funding policy will continue to be a  challenge. According to market sources its 5-year USD  bonds due 2018 issued  in Jan this year  is trading at ~8.4%, or ~3.7% higher in annual yield than Noble Group's equivalent despite the Temasek support. Long term USD  interest rates have only just begun to inch higher after a 30-year down trend so refinancing  cost  is likely to be  higher going forward.

 

Olam has a nice portolio of businesses but its high debt funding policy will continue to be a  challenge. According to market sources its 5-year USD  bonds due 2018 issued  in Jan this year  is trading at ~8.4%, or ~3.7% higher in annual yield than Noble Group's equivalent despite the Temasek support. Long term USD  interest rates have only just begun to inch higher after a 30-year down trend so refinancing  cost  is likely to be  higher going forward.

 

Thanks for pointing out.  Was trying to base my argument on M& M proposition, apparently I got it all mixed up. 

 

IGNORE MY ARGUMENT ON ROA & ROE.====> > > > > THEY ARE WRONG!!!!!



Sorry About That =.=''

pineapple123      ( Date: 05-Jul-2013 15:51) Posted: i'm not vested in olam but i thought i should clarify some things here.   1) ROA represents return on assets, NOT cost of borrowing.   ROE represents return on shareholders equity, NOT cost of equity. 2) Accounting 101: Assets = Liabilities + Equities. ROA = Net Income / Total Assets ROE= Net Income/ Total shareholder equity As long as a company takes on some debt (even the slightest bit), ROA will always be less than ROE.   ROA can never be > ROE. it can only be at most equal, which is when the company has zero liabilities, which is realistically impossible.   The way to use ROA and ROE together is as follows.   If ROA is sound and debt levels are not too high, a strong ROE means that the company is doing a good job of generating returns from shareholder equity.   However, if there is a low ROA and high ROE, it can give a false impression to shareholders on the efficiency of management in using its sources of capital.  Rosesyrup      ( Date: 05-Jul-2013 15:23) Posted:   How is Olam going to refinance its debt? Well, it could be by bonds, equity, bank borrowing etc. Asking such question is as good as asking: How is Olam going to transport its nuts and coffee from the field? How is Olam going to hire its next CEO?  The answers to these questions should really be handled by the management and that's what they are paid to do. Rather, a better question would be: Is Olam over leveraged such that it's deterimental to the shareholders? To answer the question, we should look at both ROA and ROE. The former is the cost of borrowing while the latter is the cost of using shareholders' fund (aka cost of equity), and the combine of both make up the cost of financing (COF). A firm is able to increase its value by reducing its COF, which is simply a cost. Since cost of borrowing is often cheaper than cost of equity, Olam reduce its COF by borrowing. However, as  Olam take up more and more debt, its cost of borrowing rise due to higher risk for lenders.This means that Olam  can only borrow to increase its firm value, so long as its cost of borrowing is lower than its cost of equity. Simply put, Olam use of debt is benefitting shareholders as long as ROA< ROE. And Olam's debt is deterimental only when ROA> ROE. Now, lets look at Olam's ROA and ROE  to solve the our question:  Is Olam over leveraged such that it's deterimental to the shareholders? Olam's ROA=2.98% while its ROE=11.13%, thus ROA< ROE. We can thus conclude that since ROA  is safely below  ROE, Olam use of debt is beneficial to shareholders as it reduce the cost of financing. Thus Olam is not over leverage, and  in fact with ROE so much higher than ROA, Olam could have use more debt to further create more shareholders' value. Reference: 1) http://markets.ft.com/research/Markets/Tearsheets/Financials?s=O32:SES 2) http://topmanagers.ca/BlogSubDetail.aspx?DocId=13& CurYear=0

 

i'm not vested in olam but i thought i should clarify some things here.  

1) ROA represents return on assets, NOT cost of borrowing.   ROE represents return on shareholders equity, NOT cost of equity.

2) Accounting 101: Assets = Liabilities + Equities.

ROA = Net Income / Total Assets

ROE= Net Income/ Total shareholder equity

As long as a company takes on some debt (even the slightest bit), ROA will always be less than ROE.   ROA can never be > ROE. it can only be at most equal, which is when the company has zero liabilities, which is realistically impossible.

 

The way to use ROA and ROE together is as follows.   If ROA is sound and debt levels are not too high, a strong ROE means that the company is doing a good job of generating returns from shareholder equity.   However, if there is a low ROA and high ROE, it can give a false impression to shareholders on the efficiency of management in using its sources of capital. 

Rosesyrup      ( Date: 05-Jul-2013 15:23) Posted:   How is Olam going to refinance its debt? Well, it could be by bonds, equity, bank borrowing etc. Asking such question is as good as asking: How is Olam going to transport its nuts and coffee from the field? How is Olam going to hire its next CEO?  The answers to these questions should really be handled by the management and that's what they are paid to do. Rather, a better question would be: Is Olam over leveraged such that it's deterimental to the shareholders? To answer the question, we should look at both ROA and ROE. The former is the cost of borrowing while the latter is the cost of using shareholders' fund (aka cost of equity), and the combine of both make up the cost of financing (COF). A firm is able to increase its value by reducing its COF, which is simply a cost. Since cost of borrowing is often cheaper than cost of equity, Olam reduce its COF by borrowing. However, as  Olam take up more and more debt, its cost of borrowing rise due to higher risk for lenders.This means that Olam  can only borrow to increase its firm value, so long as its cost of borrowing is lower than its cost of equity. Simply put, Olam use of debt is benefitting shareholders as long as ROA< ROE. And Olam's debt is deterimental only when ROA> ROE. Now, lets look at Olam's ROA and ROE  to solve the our question:  Is Olam over leveraged such that it's deterimental to the shareholders? Olam's ROA=2.98% while its ROE=11.13%, thus ROA< ROE. We can thus conclude that since ROA  is safely below  ROE, Olam use of debt is beneficial to shareholders as it reduce the cost of financing. Thus Olam is not over leverage, and  in fact with ROE so much higher than ROA, Olam could have use more debt to further create more shareholders' value. Reference: 1) http://markets.ft.com/research/Markets/Tearsheets/Financials?s=O32:SES 2) http://topmanagers.ca/BlogSubDetail.aspx?DocId=13& CurYear=0 Obfuscate      ( Date: 05-Jul-2013 14:23) Posted: Just remember leverage works both ways. It works for the investor on the way up and works against the investor on the way down. In Olam's case, the company kept borrowing more and more to buy assets so it has amassed $9bn+ debt compared with $3bn+ current market cap. Question to ask yourself: how is the company going to refinance its borrowings?

 

  How is Olam going to refinance its debt? Well, it could be by bonds, equity, bank borrowing etc. Asking such question is as good as asking: How is Olam going to transport its nuts and coffee from the field? How is Olam going to hire its next CEO?  The answers to these questions should really be handled by the management and that's what they are paid to do.

Rather, a better question would be: Is Olam over leveraged such that it's deterimental to the shareholders? To answer the question, we should look at both ROA and ROE. The former is the cost of borrowing while the latter is the cost of using shareholders' fund (aka cost of equity), and the combine of both make up the cost of financing (COF). A firm is able to increase its value by reducing its COF, which is simply a cost. Since cost of borrowing is often cheaper than cost of equity, Olam reduce its COF by borrowing. However, as  Olam take up more and more debt, its cost of borrowing rise due to higher risk for lenders.This means that Olam  can only borrow to increase its firm value, so long as its cost of borrowing is lower than its cost of equity. Simply put, Olam use of debt is benefitting shareholders as long as ROA< ROE. And Olam's debt is deterimental only when ROA> ROE.

Now, lets look at Olam's ROA and ROE  to solve the our question:  Is Olam over leveraged such that it's deterimental to the shareholders? Olam's ROA=2.98% while its ROE=11.13%, thus ROA< ROE. We can thus conclude that since ROA  is safely below  ROE, Olam use of debt is beneficial to shareholders as it reduce the cost of financing. Thus Olam is not over leverage, and  in fact with ROE so much higher than ROA, Olam could have use more debt to further create more shareholders' value.

Reference:

1) http://markets.ft.com/research/Markets/Tearsheets/Financials?s=O32:SES

2) http://topmanagers.ca/BlogSubDetail.aspx?DocId=13& CurYear=0

Obfuscate      ( Date: 05-Jul-2013 14:23) Posted: Just remember leverage works both ways. It works for the investor on the way up and works against the investor on the way down. In Olam's case, the company kept borrowing more and more to buy assets so it has amassed $9bn+ debt compared with $3bn+ current market cap. Question to ask yourself: how is the company going to refinance its borrowings?

 

Just remember leverage works both ways. It works for the investor on the way up and works against the investor on the way down. In Olam's case, the company kept borrowing more and more to buy assets so it has amassed $9bn+ debt compared with $3bn+ current market cap. Question to ask yourself: how is the company going to refinance its borrowings?

 

Temasek lose $$$ too. Anyway, if you can afford to keep it for LONG TERM per Temasek, then it is fine. :)

Rosesyrup      ( Date: 05-Jul-2013 13:45) Posted: Regardless. Anyway Temasek Holding's porfolio just hit record high: http://www.cnbc.com/id/100864417   So to those who  have  doubted Temasek's capability and foresight, that's something for you to choke on.

 

Regardless. Anyway Temasek Holding's porfolio just hit record high:

http://www.cnbc.com/id/100864417

 

So to those who  have  doubted Temasek's capability and foresight, that's something for you to choke on.